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KLM Royal Dutch Airlines

Based in Amsterdam, KLM is the national airline of the Netherlands. Part of the Air France-KLM Group, KLM operates an extensive network which includes services within Europe and to Asia, Africa, North America, Central and South America and the Middle East. KLM is a founding member of the SkyTeam alliance.

Location of KLM Royal Dutch Airlines main hub (Amsterdam Schiphol Airport)


 
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220 total articles

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Alitalia's "new" strategy realigns it to feed Etihad, but needs to change loss-making mindset

24-Jan-2015 8:01 PM

Alitalia has announced a new strategy to accompany its newest incarnation, following Etihad Airways' acquisition of a 49% stake in the Italian airline from 1-Jan-2015. The strategy includes the aim to return the company to profit in 2017, after a long period of losses. The five main elements of Alitalia's strategy focus on the network, cooperation with partner airlines, the fleet, "guest services" and the brand.

Alitalia's statement does not contain much of consequence that has not previously been flagged. Rather, it reiterates adjustments to its network designed to complement that of Etihad.

There will be less direct flying to Africa, a little more to Asia and a lot more to the Middle East to feed Etihad's hub. Alitalia will also increase its operations in the Americas and in Europe, where Etihad's own presence is smaller.

The crucial question that the statement does not address is how Alitalia will go about changing the mindset, developed over many years, that regards perpetual losses as the norm. Even if the necessary cuts can be achieved, such an entrenched culture is not easily redirected. Yet, for Alitalia, this is surely the last throw of the dice.

Delta Air Lines finishes a solid 2014 ready to face currency headwinds and macro pricing pressure

21-Jan-2015 10:30 PM

Delta Air Lines recorded a strong financial performance for 4Q2014 and YE2014 – excluding special items – driven by continued strength in its domestic entity and a solid cost performance as non-fuel unit costs remained essentially flat throughout 2014.

Delta is starting 2015 with headwinds due to the appreciation of the USD against some weaker currencies, but remains confident of meeting its stated financial targets that include ROIC of more than 18% and operating margins of 11% to 14%.

An anticipated significant USD2 billion in fuel savings during 2015 will also help blunt some of the effects from currency weakness; but Delta is stressing that it will use the savings to slash debt, and pending board approval, possibly increase shareholder rewards.

Air Canada SWOT: Working towards sustainability, but familiar foes await - along with some new ones

9-Jan-2015 9:53 PM

Air Canada during the last couple of years has worked diligently to repair its balance sheet, improve its leverage and reduce costs; as a result it is now beginning to enjoy some of the fruits of its labour by meeting its return targets and sustaining liquidity well above its minimum threshold.

The Canadian flag carrier has also undertaken a network revamp that includes the creation of its low cost subsidiary rouge and a push into long-haul international markets, leveraging its position as Canada’s leading global airline.

But Air Canada faces challenges as it works to sustain profitability from its familiar foe WestJet, as well as potential new entrants eager to execute the ULCC model within Canada. The airline will no doubt have focussed on these threats, and be aware there is still much to prove as its efforts to transform its business continue.

This CAPA analysis of Air Canada's strengths, weaknesses, opportunities and threats continues a series on global airlines.

China Southern 6th airline in history to carry over 100m passengers. Now for improved efficiency

6-Jan-2015 8:13 PM

China Southern Airlines has become the sixth airline group in the world – and the first outside the United States or Europe – to transport over 100 million passengers a year. Founded only in 1988, China Southern reached this milestone in 2014 faster than the other groups carrying over 100m passengers: American Airlines, Delta Air Lines, Lufthansa Group, Southwest Airlines and United Airlines. Ryanair expects to carry 97m passengers in 2015, likely leading it to carry 100m shortly thereafter.

The Air China and China Eastern groups are expected also to cross the 100m mark. Fast growth at the HNA Group could also see it carry 100m passengers around the turn of the decade. This would be impressive given the group has limited public capital, but would also give China four groups with over 100m passengers, matching the US.

China Southern is big, but this fast growth, partly organic, partly through merger, has come at the expense of efficiency. It may have the highest growth prospects but it also has considerable work ahead to become agile. It could also have the most at risk as its core domestic market faces new competition while long-haul performance continues to lag.

KLM: a decade after Air France merger, the smaller, but more profitable partner also needs cost cuts

12-Dec-2014 11:47 PM

KLM, the world's oldest airline still operating, turned 95 in Oct-2014, after passing the 10th anniversary of its merger with Air France earlier this year. A pioneer of the international hub and spoke model, KLM's continued operational effectiveness is illustrated by its industry leading load factor. Although, before the merger, it often struggled for profitability, it has consistently achieved higher operating margins than its sister airline Air France since their 2004 union.

In spite of these marks of success, KLM CEO Pieter Elbers, promoted to replace Camiel Eurlings in Oct-2014, is asking employees to suggest ways of making cost savings of EUR700 million over five years. This is to fund widebody upgrades and service enhancements, including new seats for 15 Boeing 777 aircraft and business lounge expansion. KLM is also placing a freeze on new cabin crew hires and giving consideration to job reductions.

Much of the commentary on Air France-KLM Group's new Perform 2020 programme has focused on Air France, loss-making since FY2009. In this report, we look at KLM's post merger track record at a time when its margin is under pressure.

Long-haul flights into secondary Chinese airports are challenging but airlines continue fast growth

12-Dec-2014 2:00 PM

The history of intercontinental passenger routes into secondary Chinese cities is brief: as recently as 2010 there was on average just one or more long-haul flight a day into a secondary market. This more doubled in 2011, and in 2015 there will be 11 flights a day. These will be spread across 26 city pairs, up from only four in 2010. Most secondary long-haul routes are to Europe, with the Middle East and Australia prominent. North America is catching up.

Foreign airlines have led the push, namely KLM and Lufthansa. Etihad Airways and Qatar Airways were also some of the first before being joined by others including British Airways and United Airlines. Chinese carriers are gaining a presence on secondary long-haul routes, largely as a result of incentives and subsidies. In 2015 so far there will be eight foreign airlines operating secondary routes compared to five Chinese airlines. 2015 marks the first time a secondary long-haul route (Etihad's Abu Dhabi-Chengdu) will be operated daily across the year. The routes as a group face sustainability challenges, with losses common, but more growth is still likely.

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